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26/08/22
15:59
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Originally posted by GCar:
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Here's an interesting consideration wrt selling stock to eg fund property purchase.... Selling in one go compared to selling down over multiple financial years...? Simplified scenario: Assume $1M of stock Assume no other income Assume CGT discount applies Option A: (outright purchase) Sell $1M stock in one hit Assume $800k profit Pay tax circa $150k $850k in pocket (85% in pocket) Option B: (outright purchase) Sell stock across 2 financial years eg. sell $500k stock in June and $500k in July Assume $800k (2 x $400k) profit as before Pay tax circa $120k total (2 x $60k/yr) $880k in pocket; pays for the kitchen renovation lol (88% in pocket) Option C: (pay down loan over time) Sell stock gradually over say 10 years ie. sell $100k per year Assume $80k profit per year Pay tax $40k total (10 x $4k/yr) $960k in pocket (96% in pocket) For option C: Need to factor inflation effects Need to factor sp growth over time Need to factor potential dividends over time Need to factor interest rate for cost analysis and comparisons... etc Just some food for thought and NOT ADVICE in any way. IMO some careful thought + option C (or some variation of) might be a very interesting choice....? Thoughts?
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ps. yes I realise option C would take longer than 10 years or require >100k per year, due to loan interest. the interesting point imo is the tax advantage and potential for capital growth/earnings in the lengthy period...